What are some common tier hierarchies in loyalty programs?

Using SessionM, you can configure the tier hierarchy that works best for your loyalty program. Common tier hierarchies include:

  • 3-tier point-based

  • 3-tier point-based with escrow

  • 3-tier purchase-based

  • 3-tier point and event

  • Single tier

  • Single-tier with auto-purchase

3-tier point-based loyalty program

The three-tier, points-based system is perhaps the most common setup for a loyalty program. Three tiers create a clear hierarchy among high-, middle- and low-value members. Advancing through three tiers is difficult but attainable, keeping program engagement high. Points determine tier status. By increasing their point balance, members advance through the tiers.

The Koalla Clothing loyalty program is an example of three-tier, points-based loyalty program.

3-tier point-based loyalty program with escrow

A point program with escrow is tailored towards retail brands. An escrow program prevents members from purchasing items with a return policy, using points gained from the purchase, and then returning the items after the points have been used. To counteract this, escrow accounts are established as holding accounts where a member’s points reside for a set amount of time (usually the length of the return policy) before being released into the member’s spendable points accounts.

See Points escrow for more information.

3-tier purchase-based loyalty program

The purchase-based loyalty program is similar to a point program. Instead of tier entrance and maintenance rules based on points earned and current balance, a purchase-based program focuses on how much money a customer spends over a set amount of time.

3-tier point and event loyalty program

The 3-tier point and event loyalty program is another variation of the standard 3-tier point program. Instead of tier entrance and maintenance rules based solely on points earned and current point balance, this hierarchy adds an event as an additional requirement for tier entry. For example, a member must create a profile before being eligible to earn points and rewards.

Single tier

A single-tier is the most basic type of loyalty program. It's likely that the concept of "tiers" isn't even conveyed to members. Members earn points for purchases and redeem them to discount future purchases. This type of program is commonly called "earn and burn".

Single-tier auto-purchase loyalty program

When members reach a point threshold, SessionM automatically spends those points on their behalf. Typically, there is a single tier with the auto-purchase rule limiting the number of points a member can accumulate at one time.